What is the best way to purchase your first house??

Question

I am considering moving out of my house (I am a second year college student) and having about 3 other people living with me. I was always taught that it is not wise to rent out a living space b/c you will be throwing away your money and to instead look into something that you will be putting money into to own. So I was looking online and noticed that there are different options to search for: homes for sale, new homes, and forclosures. What is the difference between buying a forclosure and a regular house on the market? And is it practical for a college student to look for a home to pay for instead of rent out if that may not be your permanent living situation for more than 2 years (because of possibly transfering to a school far away)? Any tips for college students trying to move out w/ a friend or a small group of people to make a household? Also can anyone give me an idea about how much monthly bills are (water, electric, etc.) for a four person household? THANKS!!

Answer 1

If you are a typical student, your problem will be that your income will not appear to support the mortgage.  I doubt that you will qualify for a mortgage unless your financial situation is quite unlike the typical student.  Also, your short time frame (2 years) makes the finances questionable.  (Less time to recover the transaction costs such as realtor's fee and closing costs.)

So it's probably best just to save your money up so as to be in a better position to buy a house later.

One alternative might be to have your parents purchase it and rent it to you.  They probably trust you more than the bank does (depending on what their experience of you has been), and at least they would get financial rewards from your housing situation.  However, even then they probably wouldn't want to do that for just two years (for four years it might be a very attractive idea.)

Continuing to rent is probably the ideal solution for your current living situation.